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Funding Mechanisms for Officers of Parliament

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Standing Committee on Access to Information, Privacy and Ethics

February 10, 2005
Ottawa, Ontario

Opening statement by Jennifer Stoddart
Privacy Commissioner of Canada

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Thank you for inviting us to comment on the funding mechanisms and governance models for Officers of Parliament. This is a very important question given the necessary independence of an Officer of Parliament who is an ombudsman and also has oversight functions and as a result has been granted important status as an Officer of Parliament.

We are here today to comment on the rationale for the independent funding of Officers of Parliament and to comment on the potential alternative mechanisms for this. In short, the structural independence appropriate for the functions we fulfill calls for an arms-length funding mechanism based on objective and expert analysis.

I would also like to share a few insights on the governance structure under which we currently operate. If I may, I would like to start by providing some context regarding the current accountability regime of the Office of the Privacy Commissioner of Canada, our relationship with the Treasury Board Secretariat and some of our unresolved financial challenges.

The current accountability regime of the OPC

As set out in our legislation, the Office of the Privacy Commissioner produces an Annual Report covering activities under both of our statutes: the Privacy Act and the Personal Information Protection and Electronic Documents Act (PIPEDA).

We also, consistent with the federal government approach to performance planning and reporting, table yearly a Report on Plans and Priorities (in the spring) and a Departmental Performance Report (in the fall). Since 2003-2004, our annual financial statements are audited by the Office of the Auditor General.

Our Office has also created an External Advisory Committee which brings together varied privacy and public administrative expertise as well as senior experience in serving the needs of Parliament and Parliamentarians. This Committee meets once or twice a year to discuss emerging priorities and strategies. Drawing from their unique professional experience and vantage points, each member of the Advisory Committee has played a seminal role in helping shape our institutional renewal strategy.

These accountability documents and the management representations that ensue from their tabling at the House of Commons and the Senate, assist in informing Parliamentarians about salient privacy issues. They also provide an opportunity to canvas Parliamentarians' views on priorities and strategies. They also help Canadians understand what their national institution is doing to protect privacy rights and to educate the public and private sectors about their privacy responsibilities.

Current funding mechanisms for the Office of the Privacy Commissioner

At present, our Office, like all federal government departments and agencies, negotiates its budget with the Treasury Board Secretariat which then makes a recommendation to the Treasury Board ministers. There is, however, a fundamental difference. Officers of Parliament are, by design and by institutional arrangement, independent in setting their Plans and Priorities. There is therefore, a seeming contradiction between the independence necessary to carry out our functions and our institutionalized financial dependence on government.

From 1983 to 2001, the Office was funded to fulfill its responsibilities under the Privacy Act; the budget for 2001-2002 was $4.4 million. With the enactment of the Personal Information Protection and Electronic Documents Act, the Office received an additional amount of $6.6 million per annum for three years. The three year limit on the approved funding recognized the fact that it was not possible to reliably forecast the workloads and resource requirements necessary after the full promulgation of PIPEDA. This law came into force incrementally from January 2001 to January 2004.

While the original intent was that this Office would have submitted to Treasury Board by October 2004 a solid business case for securing stable long term funding, organizational issues which have been well documented in the recent past have not allowed us to meet that target. From an operational perspective, there was also a high degree of uncertainty surrounding the forecasting of future workloads and related resource requirements resulting from full implementation of PIPEDA. In the absence of long term funding — and a cogent business plan that would clearly articulate where investments were needed — the Treasury Board has continued to fund PIPEDA on a year to year basis from 2004 to 2006.

Let me clearly state that we have a very good working relationship with the Treasury Board Secretariat. As I have mentioned in our previous appearances before this Committee on our Main Estimates and Supplementary Estimates, our Office is closely working with Treasury Board Secretariat to determine the appropriate level of funding required to carry out our mandate.

A funding mechanism which parallels the OPC's independent status

Let me outline some reasons for why the funding for the Office of the Privacy Commissioner should in fact be independent.

In addition to the fact we are an Officer of Parliament, we must consider the very nature of our ombudsman role on privacy issues for the public and private sectors. As an ombudsman and oversight agency of government for Parliament, we investigate and audit other federal departments and agencies. The necessary independence of our role as an ombudsman has been recognized by the Supreme Court of Canada in the 2002 Lavigne decision which states that we are "...independent of the government's administrative institutions...".1

Let us now turn our attention to alternative funding and governance models. Ms. Sheila Fraser, Auditor General of Canada, recently stated before Parliament in referring to her own office that "...valid questions can be put to us about our budgets, our spending, our priorities and the way we select our audits. However, I am fully convinced that those questions should not come from one of the organizations that we have to audit. Therefore, there should be an independent mechanism to make sure that we go through a rigorous review, but not by someone that we are auditing."2

The similarity of our functions would strongly suggest a similar funding approach. Alternative funding mechanisms which would allow for greater financial independence of our Office should be explored.

Governance and funding of Parliamentary Officers

Although we have not studied in detail all the possible alternative financial mechanisms that could be appropriate for Officers of Parliament, we have conducted a cursory conceptual review of the options being proposed by the Auditor General, the UK model, the current model being used in Canada for the Senate Ethics Office and the Ethics Commissioner and the concept of a Blue Ribbon Panel. We agree in principle with the latter approach. Key governance issues need however be addressed. While Terms of Reference and operational modalities have yet to be defined, our Office supports the concept of creating a Blue Ribbon Panel.

The concept of a Blue Ribbon Panel model is aligned with the need for independence for our Office and doubtless for those of other Officers of Parliament. It is designed to provide a well-functioning accountability and transparency regime. This approach also does not require legislative changes, an avenue which we would favour at this point in time.

Other models could also be envisioned based on the respective experiences of the UK, New Zealand, Australia and other provincial jurisdictions in Canada.

Closing remarks

In closing, I would like to reiterate that our Office's most immediate priority is to stabilize its resource base and to complete our institutional renewal strategy. The cooperation with the Treasury Board now rests on a solid footing and we wish to complete our business plan with a formal submission to the Treasury Board of Canada by next summer. The OPC will continue to work within the current framework but is very interested in discussing alternative models as well. Serving Parliament and the public interest requires no less from all of us to best meet the needs of Parliament and Canadians.

Thank you very much for your time today.

I would be pleased to respond to any questions you might have.

1 Supreme Court of Canada [2002], at para 37.2 OAG Appearance before the Standing Committee on National Finance, December 1, 2004.